Education Week - Navigating the Ed-Tech Marketplace - S16

MARKET SEGMENTS
Investments in Assessment Fuel
Instructional Support
The professional-development market sees revenue increases,
but LMS companies experience major declines
BY MICHELE MOLNAR
D
istricts invested more
money in assessment
than anywhere else in
the U.S. ed-tech marketplace,
spurring 37
percent growth in the
testing portion of the "instructional
support" market
segment, according to
a survey of companies by
the Software & Information Industry Association, or
siia, a trade association for the software and digital
content industries.
The estimated $2.2 billion in revenues that ed-tech
companies generated during the 2011-12 school year
from various aspects of digital testing and assessment
largely fueled the overall growth in instructional
support, making it the second-largest market
segment studied. Instructional-support technology
encompasses the software that "touches" the classroom
for teaching or learning, but is not actual content
itself, according to the Washington-based siia's
definition of the category. To calculate total estimated
revenues, siaa took survey respondents' reported revenues
and extrapolated to the wider market, based
on the organization's own analysis.
Besides testing and assessment, instructional support
includes professional development; managing
instruction through learning-management systems;
productivity tools like word processing, spreadsheet,
and presentation applications; and K-12 extensions,
such as online tutoring and ged, or General Educational
Development, support. While teachers are
often the users of those products, they are generally
not the decisionmakers for district purchases.
A review of the instructional-support market shows
an uneven story. While the segment grew to an estimated
$3.3 billion in the 2011-12 school year-increasing
for the second year in a row-only the professional-development
category joined assessments in
expanding. The other portions of the market experienced
decided downturns. The learning-managementsystem
category declined by more than 50 percent,
according to the siia estimates, and the sales of productivity
tools and K-12 extensions were also down.
The growing use of online testing-spurred by the
coming online common-core-aligned assessments and
greater student access to digital devices in schools-
means educational technology is gobbling up more of
what Outsell, a Minneapolis-based research and advisory
business, estimates to be an overall $3.9 billion
K-12 testing market in the United States. The market
itself is expected to grow 4 percent to 5 percent
a year as schools add more formative assessments
and adaptive-learning tests, and the new summative
assessments to gauge mastery of common-core
standards become a reality. Formative assessments
gauge the progress of students' learning so teachers
can guide instruction, while summative assessments
seek to sum up how far students have gotten toward
mastery, and how well learning goals have been met.
"While I can't talk about any particular company,
just about everyone in that market segment, year
over year, did better," said the software-industry
report's co-author, John Richards, the founder and
president of Consulting Services for Education, a
Newton, Mass.-based company that advises education
companies.
The 9,500-student Consolidated School District
158 in Algonquin, Ill., is one example of a district
that made an assessment purchase around the time
period covered by the siia report. Consolidated 158
selected Schoolnet, which offers a suite of studentassessment
tools, after a "pretty healthy search
process," said Marisa Burkhart, the director of educational
technology for the district. "We had data all
over the place. This was a way to pull it together; it
also gave us the functionality to distribute the data."
More Content, More Data
Ms. Burkhart's district bought the Schoolnet product
about the same time the company was acquired
by Pearson, a global education business based in
London and New York City. "Things were changing
very rapidly in the assessment space. For our use, it
was perfect then, and as our use developed, the tool
developed," she said.
Much of the growth in this testing segment of the
ed-tech market is spurred by the fact that K-12 education
is at a crossroads of adding devices, digital content,
and the ability to extract more data via online
assessments, according to assessment experts.
"There have been significant improvements in
the ways schools are able to get reports and explore
the data, even trying to use some diagnostic tools
to help identify specific misunderstandings of students,"
said Michael K. Russell, a senior associate for
the National Center for the Improvement of Educational
Assessment, a Dover, N.H.-based nonprofit organization
that consults with states on assessments.
"That's clearly an advancement that should benefit
instruction and learning," said Mr. Russell, noting
that it's a trend he sees increasing.
"I think the market is going to have more and
more need for high-quality assessment as we move
into the common core," added Ellen Haley, the president
of ctb/McGraw Hill, a Monterey, Calif.-based
educational assessment publisher. "The standards
are different now; it will be challenging." n
Staff Writer Benjamin Herold contributed to this article.
The market for instructional support
is shifting on several fronts:
PROFESSIONAL-DEVELOPMENT
GAINS
Professional development grew by more than
10 percent, to approximately $543 million in
revenue in the 2011-12 school year, based on
extrapolations by the SIIA. That growth occurred
as educators were facing-and continue to
face-new standards, new technologies, and new
accountability based on student-performance data.
"We're asking 3.5 million teachers to make a huge
fundamental shift in the way they teach.
That requires professional development," said
Alvin H. Crawford, the CEO of Knowledge Delivery
Systems, a New York City-based business that
helps districts provide blended and online learning
for educators. His company's revenues doubled
between 2012 and 2013, and are on track to
do so again, he said.
Annual growth is also the norm at
Bloomington, Ind.-based Solution Tree,
according to CEO Jeff Jones. "There's
no place for fluff," he said. "Professional
development has to be research-based."
Both CEOs said they anticipate ongoing growth
in the professional-development market, propelled
by the Common Core State Standards and new
technologies entering classrooms.
DROP IN PRODUCTIVITY TOOLS
The market for productivity tools stood at an
estimated $246 million in 2011-12, a decline from
the previous year, according to SIIA extrapolations.
That downturn reflects districts' interests in
exploring free options, experts say.
"Many school districts have moved, or are
planning to move to Google Apps for Education,"
said Keith A. Bockwoldt, the director of technology
services for Township High School District 214 in
Arlington Heights, Ill. "This reduces the cost for
using suites like Microsoft Office." While Office 365
is free to school districts, the technology director
said, "they came to the party too late. On the other
hand, Google is constantly improving their suite of
tools, and it's free, too."
Earlier this year, Google came under fire
for scanning the contents of millions of
student users' Gmail messages within Apps
for Education. In April, the company announced
that it had halted the practice of scanning student
accounts for any potential advertising purposes.
S16 | NAVIGATING THE ED-TECH MARKETPLACE
EDUCATION WEEK * June 11, 2014
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